9911796707
TMI Blog2013 (4) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... ods have been decided by ld. Commissioner as old and used garments classifiable under 6309 as claimed by the importer by rejecting the claim of the DRI. Once the goods are held to be old and used, their value cannot be enhanced by treating the goods as other than old and used goods. There is no findings that the invoices issued by the overseas suppliers are fake or fabricated and that the importer had paid any amount more than that mentioned in invoices either in kind or any other manner. - Decided in against the revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... ic Jeans, Ladies Rayon Printed Pant Ladles Pant 138 Mens Cotton Pant Mens Cotton Pant 110 Rain Coat Rain coat 1 Original Short & Swim Short, Knit Short Half Pant 24 Children clothing (Rummage Light), Children Sweat, Baby Sweat Pant/Shirt Children Apparel 67 Bed Sheet Bed Sheet 7 Ladies Night gown Nighty 1 Ladies Shirts Ladies Skirts 12 Ladies Dress Ladies Mix Apparel 12 Total 540 Most of the above items were found to have no sign of appreciable wear. 3.4 Thus, as many as 83 bales out of the 540 bales of the consignment were found to contain jackets and shirts only. Moreover, most of the articles of the consignment having no 'sign of appreciable wear', as found during the said re-examination by DRI, do not appear to qualify for the description of 'worn clothing' as per requirement of Note 3 to the Chapter 63 of Customs Tariff along with the corresponding HSN Explanatory Notes discussed above. Thus, the goods of the subject consignment appear to have been mis-declared reinforcing the doubt, already raised supra, about the genuineness of the corresponding invoice submitted by S.S. Impex before the Customs Authority. This doubt appears to be further corrob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came to know what items were imported. His customers were aware of the bale code No. They also knew what items were there inside a bale against any particular bale code No. He added that each item had different price depending on its quality. 3.7 With a view to ascertain the price at which the subject imported items of article worn cloth on wholesale basis, the premises of one M/s. Ma Vabatarini Enterprises, a wholesale trading firm of 'worn clothing' was visited by the officers of DRI. The said office-cum-godown was stacked up with about 540 bales of 'worn clothing'. Similarly, the clothing was re-examined by DRI. 3.8 Thereby statement of Shri Deepak Das was recorded under Section 108 on 22-11-2008 in which he gave details of placing orders, taking delivery of goods, making payment etc. and recording Code Nos. etc. In his statement Shri Das also explained about the various entries in the Register maintained at the godown and a list of entries. It was found that about 2.1 lakh kgs. of clothing in 100 kgs./80 kgs. bales and 1.15 lakh kgs. of clothing in 45 kgs./500 kgs. bales had been purchased by the said firm for a total amount of Rs. 1.75 crores and 0.62 crore respectively. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment assessed the duty on the said goods by enhancing the value from USD 0.45 to USD 0.60 per Kg. Thereafter the goods were examined by Examination Committee. The Examination Committee in their report stated that the goods are lying with the DRI. The allegation of the DRI had been that most of the items were found to have little or no sign of appreciable therefore, does not merit classification under the Heading No. 6309. The contention is that Chapter Heading 6309 is for worn clothing and there is no sub-heading under this heading of worn clothing under the same category. The DRI attempt to classify the goods under different chapter heading is contrary to their own stand since nowhere they have stated about imported goods are new articles. The contention is that the American used Cloth Inc. deals with old and used worn cloths which is also confirmed by Examination Committee and even the Panchnama drawn by DRI officers themselves. The parameter adopted by DRI is that expert opinion when DRI has valued the goods on the basis of alleged market prices of worn cloth which had been held to be the similar to the impugned goods. 4.1.2 The contention is that the declared value of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racts Ors. v. Commissioner - 2011 (272) E.L.T. 619 (Tri.) • Vinayaka allies Pvt. Ltd. v. Commissioner - 2009 (246) E.L.T. 540 (Tri.) 4.1.4 The contention is that the Commr. has accepted the classification and the Department could not provide any evidence that the invoice of foreign supplier was available and there was no evidence of flow back of fund. Therefore mis-declaration of amount of classification and valuation against them is not sustainable. The contention is that the Redemption Fine of Rs. 4,25,000/- has been worked out as 25% of Rs. 16,98,440.51 arbitrarily enhanced by the Commr. since the value determined on the basis of order of Customs House of $0.60 for the re-determination of goods of Rs. 6,41,233.32 instead of declared value of Rs. 4,76,163.36. Therefore, the Redemption fine should be based on margin of profit by taking into consideration the aforesaid value. The contention of the appellant is that Hon'ble Tribunal consistently imposed and fixed Redemption fine @ 10% and penalty of 5% of the value of the imported goods and placed reliance on the following decisions : (a) Rex Printing Press, 2005 (184) E.L.T. 73 (Tri.-Bang.) (b) Navpad Enterprises, 2009 (23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it is not obligatory on the part of Customs House Agent under any Provision of the Rules and regulations framed therein to keep the Customs Authorities informed about the wholesale prices of the goods produced in the domestic Indian market. The obligation has been cast upon the importer to ensure correct/genuineness of the nature and the value of the goods invoice/documents before handing over for the preparation of the bill of entry and seeking clearance thereof on behalf of the importer and to find out the correctness of the above aspect of whatsoever officer of the Customs Department is concerned in this manner. The contention is that the alleged involvement in clearance of old and used garments cannot be justifiable fact in the present case. The contention is that Penalty under Section 112 has to be arrived at after determining the fact that the said goods in the present case were liable for confiscation for mis-declaration and mis-description thereof and its value. The contention is that the Commissioner has erred in holding that appellants responsibility for all transactions in relation to the said goods since the goods are very old and used and no transaction had taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each bale was marked with a specific code number and each code number signified a specific item. For example bales having code of L.C.P (new) were found to be containing 'ladies cotton pant only". Md. Umar Khan, father of the proprietor of the importing firm, in his statement dated 17-2-2009 and 18-2-2009 recorded under Section 108 of the Customs Act, admitted that he was fully aware of the fact that code number was written on each bale and that his customers also know about the bale code number and what such code denotes and which item is inside the bale having the specific code. He also admitted that each item has different price depending on its quality. Thus it is quite obvious that no mark no. and code no. was mentioned in the invoices and packing list deliberately to suppress the true identity of the imported goods. It further appeared that the price declared in the invoices is not reflecting the true value of the individual items imported." 5.2.7 The officers of the Customs Examination Committee were also found to have not examined the goods properly as is evident from their findings dated 5-9-2008 vis-à-vis finding of DRI on re-examination dated 10-2-2009, 11-2-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n even if the relevant section is not mentioned in the show cause notice as held by Hon'ble High Court of Delhi in AVI Steel Traders v. Commissioner of Central Excise [2010 (260) E.L.T. 43. Del.]. 5.2.9 As regards valuation, the contention is that the investigation was carried out with one Ma Vabatarini Enterprise, the wholesale trader for such imported goods. It was found that that Mr. Umar Khan of Ma Vabatarini Enterprise repeatedly violated exim policy hence the penalty imposed. From the Register of Ma Vabatarini Enterprise, the wholesale price of goods were ascertained and the redemption fine and penalty imposed were accordingly determined. The contention is that most of the NIDB data provided by the importer at the time of adjudication belongs to clearance through Kolkata Port only and the import value also varied widely from Rs. 10/- Kg. to Rs. 137/Kg. which also proved that without knowing the exact composition of each consignment, value cannot be compared with each other. Ld. Adjudicating authority also discussed in detail why he had accepted the valuation Rule 9. The statement given by Shri Deepak Das of Ma Vabatarini Enterprise regarding the record produced by him were c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or DRI wanted to revise old practice. The Examination Committee ought to have been put on to notice. They placed reliance on Hon'ble High Court of Calcutta's decision in the case of Mercantile Express Co. Ltd. v. Assistant Collector of Customs [1978 (2) E.L.T. (J552) (Cal.)] and in the case of Sandip Agarwal v. Collector of Customs - 1992 (62) E.L.T. 528. The contention is that they are also protected under Section 155 of Customs Act, 1962, they have placed reliance on Hon'ble Supreme Court's decision in the case of Fernandes v. State - 1996 (82) E.L.T. 433 (S.C.). 7.1 We have carefully considered the submissions and perused the records. We find that the entire case is built on the premise that the impugned goods are other than claimed to be old and used garments classifiable under Chapter 6309. Undisputedly the consignment was initially examined by the Customs Examination Committee as per existing practice by strip opening without burst opening the bales and on examination found that : "Bond CWC, Maheshtalla B/E No. 422853 dated - 29-7-2008 Subsequently, the DRI carried out re-examination of 83 bales out of 540 bales after burst opening the bales and came to the conclusion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject goods were not of any uniform standard. Accordingly, said rules 4 and 5 did not have any application and said rule 9 of the Valuation Rules, 2007 supra, (corresponding to Rule 8 of the Customs Valuation Rules, 1988) had been followed in the instant case for valuation of the goods. Interpretative Note to said Rule 9 allowed reasonable flexibility in respect of the identical/similar nature of the goods. Reliance in this regard was placed on the judgment of the Hon'ble CESTAT-in the case of B.K. Spinning Mills (P) Ltd. v. Collector of Customs, Cochin [2000 (117) E.L.T. 604 (Tri.)] wherein it was held that the (erstwhile) Rule 8 of the Customs Valuation Rules was correctly applicable in case of subject goods for which there was no uniform standard. The investigating authority accordingly, was justified in taking the said value for re-determination of the assessable value of the present consignment. This was also as per the provisions of Customs Valuation (Determination of Value of imported Goods) Rules, 2007. I am inclined to accept the basis of valuation adopted by DRI under rule 9 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Consequently, I h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arable commercial transaction were assessed; (b) the sale involves an abnormal discount or abnormal reduction from the ordinary competitive price, (c) the sale involves special discounts limited to exclusive agents; (d) the mis-declaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production; (e) the non-declaration of parameters such as brand, grade, specifications that have relevance to value; (f) the fraudulent or manipulated documents. 7.5 We find that Rule 12 itself does not provide a method for determination of value. From the Explanation (I)(i) to Rule 12, supra, it is clear that this Rule by itself does not provide a method for determination of value; it provides a mechanism and procedure for rejection of declared value in case where there is a reasonable doubt that the declared value does not represent the transaction value; where the declared value is rejected, the value shall be determined by proceeding sequentially in accordance with Rules 4 to 9. Thus the Rule 12 of the CVR, 2007 does not empower the proper officer to reject the transaction value without establishing that the transaction value was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price is not sacrosanct. However, before rejecting the invoice price, the Department has to give cogent reasons for such rejection. This is because the invoice price forms the basis of the transaction value. Therefore, before rejecting the transaction value as incorrect or unacceptable, the Department has to find out whether there are any imports of identical goods or similar goods at a higher price at around the same time. Unless the evidence is gathered in that regard, the question of importing Section 14(1A) does not arise. In the absence of such evidence, invoice price has to be accepted as the transaction value. Invoice is the evidence of value. Casting suspicion on invoice produced by the importer is not sufficient to reject it as evidence of value of imported goods. Undervaluation has to be proved. If the charge of undervaluation cannot be supported either by evidence or information about comparable imports, the benefit of doubt must go to the importer. If the Department wants to allege undervaluation, it must make detailed inquiries, collect material and also adequate evidence." 7.8 We find that value was sought to be enhanced by treating the impugned goods as other than o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
